Boston–Boston’s once red-hot life sciences real estate market is showing clear signs of cooling, with vacancies climbing to record highs, rents falling, and developers pulling back from new speculative construction, according to the latest Q3 2025 Life Sciences Market Report from Colliers.
Colliers reports that lab market vacancies continue to rise, shifting negotiating power toward tenants, while asking rents are falling across all major submarkets. The brokerage also notes that only a small number of distressed assets are trading, and the wave of speculative lab development that defined the last several years is finally tapering off.
Vacancies Surge Across the Metro
The report highlights that Boston’s life sciences market has now recorded negative net absorption in six of the past seven quarters, as biotechnology firms contend with multiple headwinds — from tight venture capital conditions and weak company valuations to higher H-1B visa fees, FDA process disruptions, and staff reductions that have threatened tax incentives.
Nearly 15 million square feet of direct lab space and 3.6 million square feet of sublease offerings are now on the market — together representing 32.2% of the region’s total life sciences inventory.
More than 30 newly completed lab buildings remain entirely unoccupied, the report found. As a result, many developers are shelving or reconfiguring planned lab projects — with some pivoting to other property types or selling potential development sites altogether.
Rents Decline Amid Record Availability
According to Colliers, total availability rates hit new records in the third quarter, reaching 41.7% in Boston, 25.7% in Cambridge, and 32.2% in the suburbs. Correspondingly, asking rents have declined in all three areas, with East Cambridge rents down 7% year-over-year — falling below $100 per square foot for the first time since 2021.
The report attributes this trend largely to slower venture funding. Boston-area biotech firms raised $5.5 billion through the first three quarters of 2025, which, while substantial, represents a 13% drop from 2024 and nearly 60% below 2021’s peak. However, Colliers notes that funding activity picked up in Q3, buoyed by major rounds from Treeline Biosciences, Odyssey Therapeutics, Strand Therapeutics, ARTBIO, and Avalyn Pharma, each exceeding $100 million.
Notable Deals and Emerging Bright Spots
Despite the overall slowdown, a handful of large leases injected optimism into the quarter. Lila Sciences signed one of the year’s biggest deals, taking 244,000 square feet at IQHQ’s Alewife Park campus in Cambridge. Eli Lilly leased 75,000 square feet at 645 Summer Street in the Seaport District, and TransMedics is weighing a 500,000-square-foot full-building lease in Somerville’s Assembly Park, a deal that would mark a major win for the city, which currently faces an availability rate exceeding 80%.
In the suburbs, distressed sales are beginning to occur as high vacancies and financing challenges take their toll. Recent transactions include Northeastern University’s purchase of the Burlington BioCenter for $301 per square foot, 68% below its 2022 price, and Lincoln Property Company’s short sale acquisition of Stony Brook Office Park in Waltham for $94 per square foot, also 68% below its prior valuation.
Construction Pipeline Slows
Boston has added 23 million square feet of lab inventory over the past four years, outpacing most other U.S. life science markets. Much of that expansion came from speculative projects that have since contributed to the city’s record-high vacancy rate.
Now, Colliers reports that of the 3 million square feet still under construction, a majority is pre-leased or build-to-suit, marking a shift toward more demand-driven development. Notable examples include:
-
585 Third Street (550,000 SF, leased to Takeda)
-
75 Broadway (585,000 SF, leased to Biogen)
-
290 Binney Street (566,000 SF, leased to AstraZeneca)
-
20–22 Drydock (319,000 SF, leased to Vertex)
Broader Economic Context
Colliers also points to sluggish local job growth as another factor dampening near-term momentum. Boston’s job market grew just 0.4% over the past year, less than half the U.S. rate of 0.9%, with weakness in both the education and health services and professional and business services sectors — which together represent roughly 40% of the region’s total employment.
Nationally, uncertainty is rising amid tariff-related inflation pressures, weaker consumer sentiment, and slower GDP forecasts, the report noted. The Federal Reserve cut rates in September for the first time in a year and signaled that further reductions may follow, as Chair Jerome Powell said the Fed is navigating “the tension between our employment and inflation goals.”
Colliers concludes that while Boston’s life sciences market remains the nation’s largest, it is in a period of recalibration. Tenant-favorable conditions are likely to persist in the near term as developers pause speculative construction and landlords adjust pricing expectations.
Despite the slowdown, the firm highlights that the long-term fundamentals — talent density, institutional research, and venture activity — remain strong, setting the stage for recovery once capital markets stabilize.
